MBA403 Coca Cola Amatil: Financial Analysis and Shareholder Report

This report provides a financial and economic interpretation of Coca Cola Amatil Limited, focusing on its suitability for investment. It analyzes the company's financial performance, including profitability, liquidity, efficiency, and market position, based on its annual report and other sources. The analys...Read More

Coca Cola Amatil Limited
2018
Financial and
economical Interpretation
and communication
Financial Analysis
Student’s Name

Executive summary:
Coca cola Amatil is an Australian company. The company is recognized as one of the largest
non alcoholic beverages manufacturing company. Company has also launched its alcohol segment.
The main products of the company include Diet coke, SPC, sprite zero, Fanta etc. the main services of
the company are production and delivering the non alcoholic and alcoholic beverages. This report has
been prepared to identify the investment level and the return to the shareholders of the company.
Financial and non financial position of the company has been measured to evaluate the entire position
of the company.
Analysis:
The financial analysis study has been done on the company to measure the changes into the
performance from last year. The annual report of Coca Cola Amatil limited explains that the overall
financial performance of coca cola Amatil has been changed. The profitability level of business has
been measured on the basis of the gross profit level. On the basis of the calculations, the level of gross
profit has been improved. It is 41.8% now. Further, the quick ratio of the company has been
measured. It explains about 1.16 quick ratios which is better. The company could meet entire short
term debt obligation through its quick assets.
The cash flow statement of the company explains that the cash level has been lowered. The
current cash management level of the company express that the efficiency level of the company has
been increased and explains that the cash turnover of the company has been higher due to which
higher cash is required. Lastly, the market position of the company has been measured on the basis of
the dividend amount offered to the shareholders. The total dividend amount of the company has been
improved.
Coca Cola Amatil Limited
Gross Profit Quick ratio Free cash flow dividend per share
2016 2017 2016 2017 2016 2017 2016 2017
(AUD 'M) (AUD 'M)
40.8% 41.8% 1.32 1.16 472 277 0.724 1.286
(Yahoo Finance, 2018)
Interpretation:
The changes into the profitability, liquidity, efficiency and market position of the company
have been measured and it has been measured that the overall position of the company has been
improved from last year. The financial position of the company has been altered due to various
changes into the economical and industrial trends. The annual report (2017) explains about the lower
turnover of the company. However, the company has managed to lower the margin of the expenses
due to which the gross profit level of the company has been improved.
In addition, the liquid position has been lowered by the management to manage the position
and reduce the working capital requirement of the company. The current position of the company
briefs that the company could easily meet all the short term debt on the basis of its liquid assets.
Further, the market position of the company explains that the company has offered more dividends to
shareholders from last year (Yahoo Finance, 2018). This has been offered by the company to become
more competitive in the industry as well as enhance the attractive in the market.
The overall financial position of the company explains that the external and internal changes
have impacted on the overall changes and performance of the company. The non financial information
about the company has been collected further to identify the investment level of the company. On the
basis of the study, it has been measured that the Australian beverage industry is one of the most
growing industry. The main business of Coca cola limited is to offers non alcoholic and alcoholic
beverages in various Australian and Asian pacific countries. The main locations of the company are
Australia, Samoa, Fiji, Indonesia, New Zealand, Papua New Guinea etc. (Bloomberg, 2018)

The annual report explains that the revenue and financial performance of the company has
been improved in Asian Pacific area. The IBIS world (2018) report explains that the current growth
rate of the industry is 0.4% which was -1.7% in last 5 year growth. The inflation rate of the company
has also been improved which has helped the company to improve the revenue (Trading economics,
2018). Australia unlimited (2018) explains that the research and development of Australia is quite
innovative which has helped the company to grab the international market quickly.
The key strategy of the company is to promote the product on the basis of that particular
company’s culture so that people could feel connected. The employees have been hired on the basis of
the country and the requirement of the job. The management team of coca cola Amatil is one of the
competitive strength. Their policies are quite helpful for the company. The remuneration is offered by
the company on the basis of the performance to management (Bloomberg, 2018). The annual report
(2017) explains that the highest earner of company is A.M. Watkins who has earned $ 42,28,408. The
remuneration of the company is highest in the industry. The Coca cola Amatil is offering various non
wage related remuneration to its employees to motivate them for better work (Yahoo finance, 2018).
The management team has been hired by the company in a manner that the best knowledge of them
could be used for the business.
Recommendation and Conclusion:
On the basis of the financial information, it has been recognized that the changes from last
year are better and indicating about great trend in the financial position of the company. In addition,
the economical and industry trend also add about better growth and higher revenue. The non-financial
information of the company further explains that the diversification and entry into the new foreign
markets are helping the company to improve the turnover and overall position of the company. It
recommends to the investors that the investment into the Coca cola Amatil is a better option as it
would offer better returns and the risk associated with the company is also lower. To conclude, the
overall performance and position of the company, Coca Cola Amatil limited is way better and a good
opportunity for the purpose of investment.
References:
Annual report. 2017. Coca cola Amatil limited. [online]. Accessed from:
https://www.ccamatil.com/-/media/Cca/Corporate/Files/Annual-Reports/2018/Annual-Report-
2017.ashx (available 6/6/18).
Australian Unlimited. 2018. Australian industry capabilities. [online]. Accessed from:
https://www.austrade.gov.au/International/Buy/Australian-industry-capabilities/manufacturing
(available 6/6/18).
Bloomberg. 2018. Coca cola Amatil limited. [online]. Accessed from:
https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=692765 (available
6/6/18).
IBIS world. 2018. Australian beverages and tobacco industry. [online]. Accessed from:
https://www.ibisworld.com.au/industry-trends/market-research-reports/manufacturing/beverage-
tobacco-product/ (available 6/6/18).
Trading economics. 2018. Australian inflation rate. [online]. Accessed from:
https://tradingeconomics.com/australia/inflation-cpi (available 6/6/18).
Yahoo finance. 2018. Coca cola Amatil limited. [online]. Accessed from:
https://finance.yahoo.com/quote/ccl.ax?ltr=1 (available 6/6/18).